Despite geopolitical uncertainty, demand from airlines for maintenance and spare parts is accelerating. Spare parts orders have grown from 30% to 40% year-over-year, and engine removals for shop visits are outpacing GE's current service capacity, signaling robust near-term activity.
GE has moved away from a confrontational supplier relationship model to one of 'deep technical collaborative problem solving'. This strategic shift has yielded eight consecutive quarters of increased inputs from partners, enabling GE to ramp up production significantly.
The company's $170 billion backlog in services and equipment, with new engine orders for narrowbody and widebody aircraft extending well into the 2030s, provides exceptional long-term visibility. This underpins management's confidence in achieving mid-teens services growth by 2026.
GE is actively developing its next-generation open fan engine architecture, anticipating the next narrowbody aircraft in 10-15 years. The technology aims to simultaneously improve fuel efficiency, sustainability, and durability, addressing key airline demands for the future.
The CEO emphasizes a focus on serving airline customers over reacting to competitors. This is reinforced by a business model built on 20-30 year engine support lifecycles and highlighted by public praise from key customers like the CEO of United Airlines.
Keep pulling the thread on Larry Culp.